With the housing affordability crisis growing more and more severe, it is more important than ever to have credible and thoroughly-researched information on legitimate ways to improve Utah’s housing market. One of the goals of the Housing Gap Coalition is to sponsor and spread research that, together with policymakers and citizens, will help close the housing gap.
Last year, the Kem C. Gardner Policy Institute, in partnership with the Salt Lake Chamber’s Housing Gap Coalition, released a landmark study that identifies five best practices developed by local jurisdictions aimed at meeting the housing affordability challenge in Utah. The study recognizes that no single practice answers the growing threat of housing affordability. That’s why the report focuses on five methods of fixing our housing market:
Zoning ordinances control the supply of housing through land use, density, and design regulations. These regulations, more than any other local policies, govern the annual supply of single-family and multi-family housing and provide a powerful policy tool to increase the supply of housing. Currently, zoning ordinances in many Utah cities lag market preferences. Changing those ordinances can allow higher density development on formerly single-family parcels, increasing the number of households in a given area.
Preservation of Affordable Housing
The preservation and rehabilitation of existing affordable units typically cost 40% less than the cost of new affordable rental units. Affordable housing preservation programs usually target privately owned subsidized rental housing, which are required to remain affordable for a specific period, depending on the program. However, once the time requirement has expired, the property owner has the option to opt out of the subsidy program, which almost always leads to a loss of affordable units. Public housing authorities can combat this by collaborating with owners of affordable housing projects, non-profits and for-profit developers, Housing and Urban Development, and Utah Housing Corporation to incentivize the preservation of this affordable housing.
Redevelopment Agencies and Tax Increment Financing
Redevelopment agencies (RDAs) in Utah have used tax increment financing for over 50 years to spur economic development. Tax increment financing is used to help finance investment in a targeted geographical area designated as a project area. At the establishment of a project area, the current local property tax revenue from the land and structures within the project area becomes the “base” amount of property tax revenue. As economic development occurs in the project area, property values rise, and property tax revenues increase. By establishing more of these project areas, more housing could be added to the market without requiring taxpayer investment.
Accessory Dwelling Units
An accessory dwelling unit (ADU) is a smaller dwelling on the same property as a single-family structure. As limited housing supply continues to push prices and rents higher, affordability remains a challenge for many, especially those entering the housing market and those looking to downsize. When properly utilized, ADUs can be a tool for delivering affordable units to the market. They can quickly provide affordable options in areas with higher rents increasing affordable housing in owner-occupied, high-cost, residential neighborhoods.
Transit-oriented developments (TODs) are compact, mixed-use developments anchored around transit hubs and walkable communities. Zoning for high-density housing often comes with the establishment of a TOD, which has the additional advantage of reducing transportation costs and increasing access to jobs, education, essential goods, and local services. TOD zoning has the capability to facilitate the development of affordable, high-density housing in cities that need it most.
Jim Wood, Ivory-Boyer Senior Fellow at the Kem C. Gardner Policy Institute acknowledged that it will take all of us coming together to slow the increase of housing prices and heal Utah’s housing market.
“We hope that this study provides you some ideas on how you can address this serious challenge,” Wood said.
As businesses, you can play a role. We will be sharing videos from trusted community partners that we encourage you to share widely — along with articles and blog posts with vital information on the housing crisis each Utahn now faces. Together, we will work to close the gap and ensure that we — and our children and grandchildren — can continue to access safe and affordable housing in our great state.
If you would like to share your story of how the housing crisis is affecting your business, please reach out to Ginger Chinn, Vice President of Public Policy at email@example.com.